The forum of former Group Managing Directors of the Nigerian National Petroleum Corporation, NNPC, on Sunday, called for an upward review of the price of petrol. They stated that the present price cap of N145 per litre is not in line with current economic realities.
The group said this at a one-day meeting with the Group Managing Director of the NNPC, Dr Maikanti Kacalla Baru, and the immediate past GMD and current Minister of State for Petroleum Resources, Mr Ibe Kachikwu, in Abuja.
Removal of the price cap would give marketers the freedom to set their desired price for petrol based on several factors like the exchange rate and international crude price. With the Naira exchange rate falling by over 50 percent to about N412 since the current petrol price was fixed, approving the recommendation will mean that Nigerians will pay more for petrol.
The former GMDs expressed that the PMS price cap of N145 per litre was not compatible with the liberalisation policy, and did not factor in current exchange rates. He stressed that the price was not sustainable because of price-determining components like crude cost, Nigerian Ports Authority (NPA) charges, amongst others, remain uncapped.
The Nigerian government, through the Petroleum Products Pricing Regulatory Agency (PPPRA), however, said on Monday that it would not accept the advice. Sotonye Iyoyo, Acting Executive Secretary of PPPRA, speaking to Premium Times, downplayed the call for a price hike as “the personal opinion of the former state oil chiefs” as she reiterated the government’s position.
Although the government has said that it does not intend to increase fuel price, the possibility still looms as marketers continue to see the cost increase without a corresponding change in the pump price. The government, on its part, will strive hard to prevent a tax hike in a recession characterised by high unemployment and rising costs. An increase in the price of fuel will only worsen the level of inflation, which has risen for 7 consecutive months and currently stands at 17.1 percent.
